Agenda item

(External Auditor) To consider the attached reports (AGC-017-2015/16).

The External Auditor presented three reports to the Committee.

Audit Plan 2015/16

The External Auditor presented the Audit Plan for 2015/16, which summarised the significant risks that could impact on the audit. There were detailed sections setting out the scope of the audit, a risk assessment and the proposed audit fee.

The External Auditor reported that the Audit Plan summarised the proposed work to be undertaken for the audit of the 2015/16 financial year. It would be designed to respond to significant risks and indicated where the focus of resources would be in providing an opinion on the financial statements and value for money conclusion. There were three significant risks which would impact upon the Audit, these being: Management Override; Revenue Recognition; and Sustainable Finances. Management Override was concerned with those matters where a judgement had been made. The Plan set out the proposed fee for the Audit as £83,205 plus VAT, which was a reduction of £3,024 in comparison to the fee previously reported in the Planning Letter, although the fee for audit related services had yet to be confirmed.

The External Auditor stated that there had been a change in the criteria for the Use of Resources work, set by the National Audit Office. The new, single criterion was:

            “In all significant respects, the audited body had proper arrangements to     ensure it took properly informed decisions and deployed resources to achieve            planned and sustainable outcomes for taxpayers and local people.”

The External Auditor advised the Committee that the thresholds for materiality and triviality had been raised to £1.9million and £76,000 respectively.

The Committee noted that there were currently no serious issues for the Council to be concerned with in respect of the audit.

Planning Letter 2016/17

The second report presented by the External Auditor was the Planning Letter for 2016/17, which summarised the proposed fee and audit arrangements for the 2016/17 financial year.

The proposed core audit fee would remain at £64,672, whilst the proposed Certification Fee had yet to be set; as an indication, this was currently proposed to be £18,533 for 2015/16. The focus of the planned work would again be on the audit of the financial statements, the value for money conclusion and the Whole of Government Accounts return.

The planned outputs for 2016/17 were as follows:

·                  a detailed Audit Plan in March 2017;

·                  a report on any significant deficiencies in internal controls arising from the interim audit in June 2017;

·                  the final report to those charged with governance in September 2017;

·                  the opinion on the financial statements, the value for money conclusion, and certificate in September 2017;

·                  the consistency opinion on the summarisation schedules in October 2017;

·                  the Annual Audit Letter in October 2017; and

·                  the Grant Claims and Returns Certification report in December 2017.

Grant Claims & Returns Certification 2014/15

The final report presented by the External Auditor was the Grant Claims and Returns Certification Report, which had been previously circulated to Members of the Committee.

The External Auditor highlighted the key issues arising from the work, along with recommendations for the future and an action plan. An adjustment was required for the Housing Benefit Subsidy, which had led it to being qualified. The impact of this amendment was a decrease of £559 in the amount payable to the Department of Works & Pensions. For the Pooled Housing Capital Receipts Return, an issue was identified relating to the recording of quarterly amounts arising from the disposal of dwellings which took place before 1 April 2012 under the Right-to-Buy scheme. One amount was recognised as being incorrect, which had resulted in an £8 increase in the total housing capital receipts subject to pooling. There were two recommendations for future action, both of which had been accepted by Officers.

The External Auditor reassured the Committee that it was not unusual for the Housing Benefit Subsidy to be qualified; the Subsidy itself was very complicated with a raft of regulations that had to be complied with, so there was a high risk of error.

Resolved:

(1)        That the following reports from the External Auditor be noted:

            (a)        the Audit Plan for the audit of the 2015/16 financial year;

            (b)        the Planning Letter outlining the proposed fees and programme of   work for the 2016/17 financial year; and

            (c)        the Grant Claims & Returns Certification for the year ended 31 March          2015.